Northern Sky Research

Spotting Opportunities Outside Spot Beams

Aug 5th, 2015 by Blaine Curcio   More from this Analyst | Profile

High Throughput Satellite (HTS) systems have undeniably transformed the satellite telecommunications industry, with new markets opened, new verticals developed, and new players entering the scene. With this year’s Global Satellite Capacity Supply & Demand, 12th Edition, (GSCSD12) NSR has for the first time broken GEO-HTS supply and demand into frequency bands—in addition to regions and applications—with these new breakouts revealing interesting new insights about the ways that the GEO-HTS market will develop, and in particular Ku-band.

GEO-HTS—The Market Today

IPSTAR and Ciel-2 were the first to launch Ku-band HTS, and while the latter was immediately fully leased for DTH services, the former has taken time to build up its revenue contribution. Going forward, Intelsat’s EpicNG fleet, and SES’s trio of SES-12, SES-14 and SES-15 will be the big contributors of Ku-band GEO-HTS capacity. The status of Ku-band as the “Video Workhorse” combined with the relatively more difficult business models of selling HTS capacity to data businesses, have thus far prevented operators from investing in Ku-band HTS capacity. The broader trends at play are an exponential Over-The-Top (OTT) video demand, flattening of Linear TV viewership and the acceptance of HTS as the “Data Workhorse”.

A few years in, NSR expects that those that have the spectrum resources will opt for Ku-band HTS just as easily as today’s Ka-band HTS launches. At that juncture, applications other than broadband access will begin to make a significant impact to HTS business planning decisions.

 

GEO-HTS—The Market Tomorrow

While broadband justifiably gets a lot of headlines as the bread and butter for GEO-HTS payloads, and while this will indeed largely be the case for GEO-HTS Ka-band capacity, it should be considered that there will be a very real market developing for HTS Ku-band, which is dominated by higher-value applications such as Commercial Mobility, Gov/Mil, and Enterprise Data.

Overall, by 2024, NSR expects over 1.5 Tbps of GEO-HTS demand, with around 1/10 of this bandwidth demand coming from Ku-band HTS. That said, Ku-band HTS will have a much larger percentage of non-broadband demand, with around 39% of the 325 Gbps of “non-Broadband HTS demand” by 2024 coming from Ku-band HTS. This is expected to total over $1 billion in leasing revenues by 2024, or more than 25% of total GEO-HTS leasing revenues. All said, the Ku-band GEO-HTS market will total 150 Gbps of demand, spread fairly evenly across several high value applications, including Enterprise Data, Commercial Mobility, and Gov/Mil. The opportunities in Enterprise Data—the largest vertical for Ku-band GEO-HTS—will include nearly 30 Gbps of demand coming from Trunking and Backhaul.

Beyond this, a large portion of GEO-HTS Ku-band demand will come from Commercial Mobility, with a significant percentage of demand coming from aeronautical, due to the suitability of GEO-HTS widebeam Ku-band beams. Overall, these higher-value applications will present a solid market for the right GEO-HTS Ku-band offerings, with a number of major players having already announced considerable investment into HTS Ku-band to target these key growth applications. 

Regional hot spots include Asia-Pacific, where Ku-band GEO-HTS has significant legacy through Thaicom’s IPSTAR, as well as the Middle East & North Africa, which is expected to see offerings enter the market in the coming years from players such as SES, Intelsat, and even ISRO with GSAT 11. For example, by 2024 it is expected that over 50% of GEO-HTS Ku-band demand will come from Asia, with the region currently leading the world in GEO-HTS Ku-band adoption.

Bottom Line

With this the first year in which NSR segmented GEO-HTS capacity into frequency bands, a number of interesting trends have emerged that have given us a new lens through which to look at the way that the GEO-HTS market is evolving. While spot beam Ka-band coverage tends to steal the headlines, there remains a significant market for Ku-band GEO-HTS services, with over $1 billion in revenues and over 150 Gbps in demand by 2024. Beyond that, these services tend to be more specialized—for instance, a commercial airliner flying at 500Mph could not practically use a <100 mile-wide spot beam—and as such, there may be a premium paid moving forward for Ku-band GEO-HTS capacity. All said, the 150 Gbps of demand coming for Ku-band GEO-HTS will be concentrated in higher-value applications, and will indeed pose a significant market moving forward.

As the leader in HTS analysis and originator of the term, NSR is the most experienced analyst firm covering this emerging market.  NSR has conducted numerous strategic advisory and consulting efforts on HTS implementation across all regions, frequency bands, applications and orbits.  Please contact Christopher Baugh for more information.